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Published: 16 Aug 2011

CITY FOCUS: From the Daily Mail 16 August 2011.

Pirates on the high seas block Britain’s bid to rule waves

By Hugo Duncan.

One evening last week, the watchman on-board a container vessel drifting off the coast of Guayaquil, Ecuador, realised he had unwelcome visitors.

On the main deck, he spotted two robbers, raised the alarm and mustered the crew.

The robbers fled, and although the seals on three containers were broken, nothing had been stolen.

As encounters with the modern-day pirates of the high seas go, that vessel got off lightly.

Far from being dashing figures like Captain Jack Sparrow, played by Johnny Depp in the Pirates of the Caribbean films, today’s maritime marauders pose an increasing threat to international trade.

They may also stand in the way of hopes that Britannia will rule the waves once again.

The Centre for Economics and Business Research think-tank has predicted that the amount of international trade Britain conducts by sea could soar as we forge stronger links with emerging markets.

It believes sea trade will grow in value by more than six times over the next 20 years – making Britain a ‘maritime nation’ once again.

But industry experts warn this seafaring renaissance will only be possible if the Royal Navy is strong enough to keep shipping lanes open and fight piracy and terrorism.

International trade is vital to the health of the UK economy, with ministers pinning their hopes on exports to drive the current recovery.

But pirate attacks rose sharply to 266 incidents in the first half of this year, up from 196 in the same period of 2010, according to the International Maritime Bureau.

The hot-spot for pirates is not the Caribbean but the Arabian Sea, where most attacks by Somali brigands take place.

At the end of June, Somali pirates were holding 420 crew members across 20 vessels, and demanding millions of pounds in ransoms for their release.

Pottengal Mukundan, the IMB’s director, said these groups are attacking more ships than ever before – and taking even more risks.

‘This June, for the first time, pirates fired on ships in rough seas in the Indian Ocean during the monsoon season,’ he said.

‘In the past they would have stayed away in such difficult conditions.’

According to the Chamber of Shipping, 95pc of UK trade by volume – and 90pc by value – is carried over the waves.

‘We are highly dependent on trade by sea,’ said John Dowden, a senior manager at the trade association.

‘We need a strong Navy to protect our interests. Whether we have enough naval ships to do that is a serious concern.’

The CEBR report said exports by sea will rise from £233bn in 2010 to £1.63trillion in 2030, while imports will increase from £345bn to £1.95trillion. Chief executive Douglas McWilliams said: ‘This will create a need to invest in port facilities and to ensure security in the sea lanes.

‘We have seen how the Somali pirates and international terrorism have affected insurance premiums for shipping.

‘These are issues that the UK will have to handle in the future as Britain becomes a maritime nation once again.’

He claimed the focus of British trade will shift from ‘short-haul’, such as across the Channel to France and the Netherlands, to ‘long-haul’ destinations, including the Middle East and Asia.

But the Royal United Services Institute warned that the Navy is ‘dangerously weak’, and international trade by sea was at risk ‘unless the future fleet is restored and adequately sized’.

The Navy, along with the other armed forces, is facing cutbacks following the Government’s Strategic Defence and Security Review last autumn – including the scrapping of the iconic Ark Royal aircraft carrier and the loss of 5,000 jobs. In addition, the historic Britannia Royal Naval College in Dartmouth, Devon, which has trained officers since 1905, may face closure.

Ultimately, the swingeing cuts could reduce the service to its smallest level since the time of Admiral Nelson.

Dr Lee Willett, a research fellow at RUSI, cautioned: ‘The role of the Royal Navy has been forgotten about because the trade keeps coming.’

In a recent report, Vice Admiral Sir Jeremy Blackham, an associate fellow at the institute, said: ‘Any trading nation has a critical interest in the secure use of the seas and the preservation of good order at sea.

‘The dependence of the West, but especially of Britain, on use of the sea for its survival and prosperity is a geopolitical fact of life.’

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